Community Mutual Savings adds fifth branch

The 122-year-old Community Mutual Savings Bank has entered the northern Westchester market with the opening of a branch office in Mount Kisco.

Bank and community officials last week joined in a grand opening at the renovated two-story, 2,900-square-foot office at 12 S. Bedford Road. The branch, the bank”™s fifth in Westchester County, adjoins a CVS pharmacy store. Community Mutual Savings Bank President and CEO John E. Ritacco presented officials from the branch”™s near neighbor, Northern Westchester Hospital, a $5,000 donation at the opening celebration.       

Ritacco last week said the Mount Kisco branch is centrally located in an affluent area of individual consumers and small businesses that the community bank hopes to attract as customers. “We believe this new branch, which offers outstanding visibility in a high traffic area, provides a tremendous opportunity for us to expand our franchise into the northern Westchester market,” he said. 

Founded in 1887 in Mount Vernon, Community Mutual maintains a branch there and also has offices in Greenburgh, West Harrison and Eastchester. Through its holding company, CMS Bancorp Inc., Westchester”™s oldest locally based bank converted from a mutual savings charter to a publicly traded company in April 2007, raising $20 million with its initial stock offering. Corporate headquarters are in downtown White Plains. CMSB has a total of 48 employees.

Though loan applications have been down in the recession, Ritacco said the community bank this year has seen “a fairly good pick-up” of applications for one-family to four-family residential mortgages either for refinancing or new purchases. “On the business side, we”™ve seen a rise in (loan) requests from small businesses, particularly as the larger banks phase out of the office-building and multifamily investment market” and limit their lending to owner-occupied properties. “We”™ve seen a marked pick-up in our business market lending.”

Since diversifying its loan portfolio under Ritacco”™s leadership, the community bank”™s lending reached $179.5 million as of March 31, an approximately $100-million increase since the end of fiscal year 2005, the company reported to investors.

By keeping a traditional, conservative approach to lending, CMSB has avoided the heavy financial losses of larger banks. Ritacco called the company “a financially strong and secure institution” with no subprime loans in its portfolio. As it did in fiscal year 2008, the bank again last quarter had no nonperforming loans, though delinquencies increased modestly. Allowance for loan losses constituted 0.3 percent of loans as of March 31.

In a six-month period through March, Community Mutual deposits grew by $16.4 million, to $145.1 million. Ritacco said the bank has seen an influx of deposits moving from larger institutions, some of which is rate-driven and some arising from customers”™ “wariness” of the large banks with their widely reported financial turmoil and impersonal customer service. Consumers are coming back to community banking, he said.

That view is supported by the findings of a recent banking survey.       

Reporting the impact of the financial crisis on community banks in cooperation with Independent Community Bankers of America, The Aite Group L.L.C. in February surveyed 743 community banks. The report found 55 percent had an increase in deposits as a result of new customers, compared with 17 percent who had customers withdraw deposits from their banks.  

The community banks also acquired new customers at a faster rate as the economic crisis deepened. Of those surveyed,  57 percent saw an increase in new retail customers during the third and fourth quarters of 2008 compared with the first half of the year, while 47 percent saw an increase in new business customers for the same period.

Of community banks surveyed, 40 percent had an increase in loan origination volume over the last year, while 11 percent said the crisis has “significantly” curtailed their institution’s ability to lend. 

Similar to Community Mutual Saving Bank”™s experience here, 73 percent of surveyed banks said  their traditionally low loan delinquencies and charge-offs had increased since the crisis although most were not subprime lenders. The Aite Group said community banks were feeling a trickle-down effect from the largest banks.